Correlation Between O I and Fidelity Advisor

Can any of the company-specific risk be diversified away by investing in both O I and Fidelity Advisor at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining O I and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between O I Glass and Fidelity Advisor Sumer, you can compare the effects of market volatilities on O I and Fidelity Advisor and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in O I with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of O I and Fidelity Advisor.

Diversification Opportunities for O I and Fidelity Advisor

0.26

Correlation Coefficient

O I  Fidelity Advisor

Modest diversification

The 3 months correlation between O I and Fidelity is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding O I Glass and Fidelity Advisor Sumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Sumer and O I is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on O I Glass are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Sumer has no effect on the direction of O I i.e., O I and Fidelity Advisor go up and down completely randomly.

Pair Corralation between O I and Fidelity Advisor

Allowing for the 90-day total investment horizon O I is expected to generate 2.15 times less return on investment than Fidelity Advisor. In addition to that, O I is 2.38 times more volatile than Fidelity Advisor Sumer. It trades about 0.02 of its total potential returns per unit of risk. Fidelity Advisor Sumer is currently generating about 0.11 per unit of volatility. If you would invest  4,150  in Fidelity Advisor Sumer on September 3, 2024 and sell it today you would earn a total of  765.00  from holding Fidelity Advisor Sumer or generate 18.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

O I Glass  vs.  Fidelity Advisor Sumer

O I Glass

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in O I Glass are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, O I is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Fidelity Advisor Sumer

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Sumer are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with O I and Fidelity Advisor

The main advantage of trading using opposite O I and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if O I position performs unexpectedly, Fidelity Advisor can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.

The idea behind O I Glass and Fidelity Advisor Sumer pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.